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Gerard	
  Grech	
  
CEO,	
  Tech	
  City	
  UK	
  
November	
  2016	
  	
  
	
  
@TechCityUK	
  
@gerardgrech	
  
Developing	
  a	
  	
  
Agenda:	
  	
  
	
  
-­‐  National	
  context	
  	
  
-­‐  Success	
  stories	
  
-­‐	
  4	
  key	
  drivers	
  	
  of	
  digital	
  
economy	
  growth	
  
	
  
-­‐	
  Why	
  is	
  this	
  all	
  so	
  important?	
  	
  	
  
	
  
Who	
  are	
  we?	
  1.	
  programmes	
  |	
  2.	
  policy	
  convening	
  |	
  3.	
  advocacy	
  	
  
-­‐	
  Founding	
  stage	
  
-­‐	
  12,000+	
  in	
  training	
  
-­‐	
  50%	
  want	
  to	
  start	
  
their	
  own	
  business	
  	
  
-­‐	
  Later	
  Stage	
  
-­‐	
  $3bn	
  raised	
  
-­‐	
  10	
  acquisitions	
  
Most	
  comprehensive	
  
annual	
  analysis	
  of	
  the	
  
UK’s	
  Digital	
  Tech	
  
Economy	
  	
  
-­‐	
  Mid	
  stage	
  
-­‐	
  Mentorship	
  program	
  
-­‐	
  £200M+	
  raised	
  
Accelerating	
  digital	
  
growth	
  across	
  
North	
  of	
  England	
  
Concierge	
  service	
  
for	
  fast-­‐growth	
  US	
  
tech	
  companies	
  
Dedicated	
  Visa	
  
Scheme	
  for	
  hiring	
  
digital	
  tech	
  talent	
  
Best	
  practice	
  mini	
  
reports	
  to	
  share	
  
learnings	
  	
  
3
British	
  Digital	
  Tech	
  Economy	
  is	
  growing	
  steadily	
  
Tech	
  Nation	
  2016	
  Report	
  	
  
£161Bn	
  	
  
Total	
  Digital	
  
Turnover*	
  
+32%	
  	
  
than	
  the	
  wider	
  UK	
  
Economy	
  	
  
Growing	
  
Source:  Tech  Na.on  2016  Report,  Tech  City  Uk/Nesta
*based  on  58K  iden.fied  Digital  Businesses
@techcityuk
@gerardgrech
Recent	
  OECD/McKinsey	
  report	
  (Aug	
  2016)	
  puts	
  UK	
  in	
  top	
  
ranking	
  on	
  digital	
  share	
  of	
  economy;	
  a	
  great	
  place	
  to	
  build	
  
form	
  	
  	
  
Acquired	
  by	
  News	
  Corp	
  in	
  2015	
  –	
  example	
  of	
  traditional	
  
industries	
  being	
  transformed	
  by	
  disruptors	
  
Acquired	
  for	
  
£114million	
  
News	
  Corp	
  harnesses	
  Unruly	
  
to:	
  
	
  
•  	
  Bet	
  big	
  on	
  mobile	
  and	
  video	
  
-­‐	
  	
  launch	
  a	
  new	
  vertical	
  
video	
  ad	
  format	
  purpose	
  
built	
  for	
  mobile	
  audiences	
  
•  provide  new  insights  to  its  
adver.sers  and  improve  ad  
engagement	
  
400  employees  in:  
New  York,  Edinburgh,  
Glasgow,  Orlando  &  
Los  Angeles
Fanduel	
  
Web-­‐based	
  fantasy	
  sports	
  game	
  and	
  the	
  largest	
  daily	
  fantasy	
  sports	
  company	
  in	
  the	
  industry.	
  As	
  of	
  April	
  2016	
  most	
  
U.S.	
  states	
  consider	
  fantasy	
  sports	
  (including	
  daily	
  fantasy	
  sports)	
  a	
  game	
  of	
  skill	
  and	
  not	
  gambling.	
  	
  
@techcityuk
@gerardgrech
Finance	
  &	
  Fintech:	
  Nutmeg	
  
Nutmeg	
  provides	
  low-­‐cost	
  online	
  wealth	
  management	
  makes	
  investment	
  expertise	
  
accessible	
  to	
  millions	
  of	
  people	
  who	
  usually	
  couldn’t	
  afford	
  advice	
  
@techcityuk
@gerardgrech
MagicPony	
  
London	
  based	
  Artifical	
  Intelligence	
  company	
  –	
  uses	
  neural	
  networks	
  –	
  systems	
  that	
  
are	
  designed	
  to	
  think	
  like	
  human	
  brains	
  
Twitter	
  acquired	
  Magic	
  Pony	
  
Technology	
  to	
  provide	
  expanded	
  
data	
  for	
  images,	
  used	
  to:	
  
•  enhance	
  a	
  picture	
  or	
  video	
  taken	
  
on	
  a	
  mobile	
  phone	
  
•  help	
  develop	
  graphics	
  for	
  virtual	
  
reality	
  or	
  augmented	
  reality	
  
applications.	
  
June	
  2016	
  
$150	
  million	
  
deal	
  
Deliveroo	
  
Raised	
  another	
  $275	
  million	
  in	
  funding,	
  a	
  Series	
  E	
  investment	
  -­‐	
  values	
  the	
  company	
  at	
  around	
  $1	
  billion.	
  	
  
The	
  investment	
  will	
  go	
  into	
  growing	
  its	
  service	
  in	
  both	
  new	
  and	
  existing	
  markets	
  &	
  investing	
  in	
  its	
  new	
  initiatives	
  -­‐	
  
includes	
  a	
  new	
  B2B	
  remote	
  kitchen	
  service,	
  RooBox	
  -­‐	
  gives	
  restaurants	
  access	
  to	
  delivery-­‐only	
  kitchens	
  in	
  key	
  
locations	
  
Live	
  in	
  84	
  
cities	
  
Facing	
  heat	
  from	
  
competitors	
  -­‐	
  targeting	
  
the	
  higher	
  end	
  of	
  the	
  
prepared	
  food	
  market	
  –	
  
rivals	
  include	
  Uber,	
  
which	
  has	
  stormed	
  into	
  
Europe	
  with	
  UberEATS,	
  
as	
  well	
  as	
  others	
  like	
  
Delivery	
  Hero,	
  Just	
  Eat,	
  
and	
  Amazon	
  
Farfetch	
  
Platform	
  for	
  luxury	
  brands	
  and	
  boutiques	
  from	
  around	
  the	
  globe,	
  everywhere	
  from	
  Tokyo	
  to	
  Toronto,	
  from	
  Milan	
  
to	
  Miami.	
  	
  
	
  
Farfetch	
  was	
  founded	
  in	
  London	
  in	
  2008	
  by	
  the	
  Portuguese	
  entrepreneur	
  José	
  Neves	
  and	
  now	
  has	
  offices	
  in	
  nine	
  
countries	
  globally.
	
  
TransferWise	
  
Banks  and  other  providers  oVen  add  markup  to  their  exchange  rate  -­‐  TransferWise  transparently  
displays  its  fee  upfront  and  deducts  it  before  conversion	
  
Latest	
  funding	
  values	
  
TransferWise	
  at	
  
£750	
  million	
  
12
	
  The	
  impact:	
  >40%	
  of	
  	
  European	
  ‘Tech	
  Unicorns'	
  ($1bn+)	
  are	
  in	
  the	
  UK	
  	
  	
  
@techcityuk
@gerardgrech
47	
  European	
  
Unicorns	
  	
  
	
  
19	
  UK	
  
Unicorns	
  	
  
	
  
3.	
  Rich	
  ecosystem	
  &	
  connected	
  nation	
  
1.	
  Smart	
  capital	
  
2.	
  Strong	
  business	
  &	
  policy	
  environment	
  
4.	
  Creative	
  talent	
  &	
  critical	
  mass	
  of	
  expertise	
  
4	
  Key	
  growth	
  drivers	
  powering	
  the	
  UK’s	
  digital	
  economy	
  
1.	
  More	
  funds	
  now	
  exist,	
  opening	
  up	
  new	
  opportunities	
  and	
  
securing	
  the	
  growth	
  potential	
  of	
  talented	
  teams	
  	
  
Selected	
  Recent	
  UK	
  IPOs	
  
$552M
Gross  
Proceeds
$3,341M
Gross  
Proceeds
$2,042M
Gross  
Proceeds
$597M
Gross  
Proceeds
$580M
Gross  
Proceeds
2,074 2,010
2,536
59
0
1,672
63
8
36
4
31
8
14
6
2
9
0
50
0
100
0
150
0
200
0
250
0
300
0
LSEG NYSE NASDAQ SGX HKSE
#ofCompanies*
London	
  Stock	
  Exchange	
  is	
  a	
  hub	
  for	
  international	
  
businesses	
  
Domestic	
  	
  
International	
  	
  
@techcityuk
@gerardgrech
London/UK	
  has	
  a	
  strong	
  investment/VC	
  eco-­‐system	
  	
  
In	
  2015,	
  5x	
  more	
  VC	
  investment	
  than	
  2010.	
  >30%	
  of	
  all	
  EU	
  VC	
  money.	
  	
  
UK	
  companies	
  	
  consistently	
  raise	
  >30%	
  of	
  
all	
  European	
  VC	
  money	
  
th
UK	
  VC-­‐Backed	
  Investment	
  Activity	
  
Top	
  Deals	
  &	
  Cities,	
  Q1’16	
  
@techcityuk
@gerardgrech
$5B
$13B
$12B
$7B$7B
$5B
$3B
$2B
$0B
$2B
$4B
$6B
$8B
$10B
$12B
$14B
2016)YTD2015201420132012201120102009
Total-VC-Capital-Invested
UK Germany France Israel Russia Sweden Switzerland RoE
82.	
  End-­‐to-­‐end	
  policy	
  conditions	
  for	
  tech	
  growth	
  are	
  ripe	
  
	
  Regulatory	
  environemnt	
  is	
  key	
  	
  
>£2.75	
  Bn	
  	
  	
  
latest	
  market	
  Cap	
  
>£1.1	
  Bn	
  
latest	
  market	
  Cap	
  
	
  
4.	
  Corp	
  Tax:	
  17%	
  	
  (joint	
  lowest	
  in	
  
the	
  G20)	
  	
  	
  
1.	
  Seed	
  Enterprise	
  Investment	
  
Scheme	
  &	
  EIS:	
  50%	
  relief	
  on	
  
capital	
  gains	
  tax	
  
3.	
  Visas:	
  Entrepreneurs’	
  Visa,	
  
Tech	
  Nation	
  Visa	
  
2.	
  R&D	
  Tax	
  Credits:	
  fueling	
  
innovation	
  	
  	
  	
  
5.	
  London	
  Stock	
  Exchange	
  high	
  
growth	
  segment	
   @techcityuk
@gerardgrech
UN	
  E-­‐Government	
  Survey	
  2016–	
  
UK	
  ranked	
  No.1	
  
•  E-­‐Government	
  development	
  Index	
  ranked	
  UK	
  
No.1	
  
•  E-­‐Participation	
  index	
  ranked	
  UK	
  No.1	
  	
  
•  E-­‐government	
  to	
  provide	
  public	
  services	
  
through	
  one	
  stop-­‐platforms	
  &	
  online	
  
transactions	
  
•  Ensures	
  that	
  public	
  institutions	
  are	
  more	
  
inclusive,	
  effective,	
  accountable	
  &	
  transparent	
  
•  Drive	
  towards	
  Open	
  data	
  for	
  public	
  
information	
  &	
  scrutiny	
  
 3.	
  Rich	
  Ecosystem:	
  >60	
  UK	
  tech	
  accelerators,	
  	
  >100	
  co-­‐	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
working	
  spaces	
  &	
  50+	
  tech	
  business	
  support	
  orgs	
  	
  	
  
@techcityuk
@gerardgrech
Edinburgh
@techcityuk
@gerardgrech
hAps://
vDme.net/	
  
Liverpool
@techcityuk
@gerardgrech
Bristol
@techcityuk
@gerardgrech
Bradfield
Centre
Cambridge
@techcityuk
@gerardgrech
2
4
+2.8x	
  1.56M	
  
UK	
  Tech	
  Jobs	
   Jobs	
  growing	
  
41%	
  
In	
  non-­‐digital	
  industries	
  
like	
  educaOon	
  &	
  Finance	
  
Faster	
  than	
  the	
  
wider	
  economy	
  	
  
£50K	
  
Average	
  UK	
  Tech	
  
salary	
  
+36%	
  
Higher	
  than	
  UK	
  
average	
  salary	
  	
  
4.	
  The	
  UK’s	
  tech	
  talent	
  pool	
  is	
  growing	
  fast	
  	
  
Source:  Tech  Na.on  2016  Report,  Tech  City  Uk/Nesta
@techcityuk
@gerardgrech
8The	
  pool	
  is	
  deep	
  &	
  extensive,	
  with	
  international	
  HQs,	
  world	
  class	
  
institutes	
  &	
  top	
  research	
  universities	
  
International	
  &	
  EU	
  HQs	
   Technology	
  Institutes	
   World	
  –	
  Class	
  Universities	
  
38	
  
ROUNDS	
  	
  
£1.5	
  Bn	
  	
  
RAISED	
  
+	
  £1.22	
  Bn	
  
RAISED	
  FROM	
  5	
  IPOs	
  
	
  	
  
+	
  10	
  ACQUISITIONS	
  	
  
In	
  the	
  last	
  20	
  months…	
  
Good	
  conditions	
  create	
  great	
  companies	
  
@techcityuk
@gerardgrech
Why	
  is	
  all	
  this	
  so	
  important?	
  We	
  need	
  to	
  create	
  a	
  sustainable	
  ecosystem	
  
and	
  future-­‐proof	
  the	
  economy	
  and	
  controibute	
  to	
  making	
  it	
  more	
  resilient	
  
&	
  productive.	
  	
  	
  
InsDtutes	
  UniversiDes	
  	
  
Govt.	
  Dept.	
  
(naDonal	
  &	
  
Inter).	
  	
  	
  
Local	
  
AuthoriDes	
  	
  
Investors	
  	
   Entrepreneurs	
  
Corporates	
  	
  
Incubators	
  
Accelerators	
  
Stock	
  
Exchanges	
  
Colleges	
  
InternaDonal	
  
hubs	
  
@techcityuk
@gerardgrech
Developers	
  
|	
  
	
  
	
  
	
  
Thank	
  you	
  for	
  listening.	
  	
  
	
  	
  
	
  
Gerard	
  Grech,	
  CEO,	
  Tech	
  City	
  UK	
  
	
  	
  
Visit	
  our	
  website:	
  Techcityuk.com	
  
	
  
Follow	
  us	
  on	
  Twitter:	
  	
  
	
  
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  @techcityuk	
  	
  
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  @gerardgrech	
  	
  

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UK BAA Keynote November 2016

  • 1. Gerard  Grech   CEO,  Tech  City  UK   November  2016       @TechCityUK   @gerardgrech   Developing  a     Agenda:       -­‐  National  context     -­‐  Success  stories   -­‐  4  key  drivers    of  digital   economy  growth     -­‐  Why  is  this  all  so  important?        
  • 2. Who  are  we?  1.  programmes  |  2.  policy  convening  |  3.  advocacy     -­‐  Founding  stage   -­‐  12,000+  in  training   -­‐  50%  want  to  start   their  own  business     -­‐  Later  Stage   -­‐  $3bn  raised   -­‐  10  acquisitions   Most  comprehensive   annual  analysis  of  the   UK’s  Digital  Tech   Economy     -­‐  Mid  stage   -­‐  Mentorship  program   -­‐  £200M+  raised   Accelerating  digital   growth  across   North  of  England   Concierge  service   for  fast-­‐growth  US   tech  companies   Dedicated  Visa   Scheme  for  hiring   digital  tech  talent   Best  practice  mini   reports  to  share   learnings    
  • 3. 3 British  Digital  Tech  Economy  is  growing  steadily   Tech  Nation  2016  Report     £161Bn     Total  Digital   Turnover*   +32%     than  the  wider  UK   Economy     Growing   Source:  Tech  Na.on  2016  Report,  Tech  City  Uk/Nesta *based  on  58K  iden.fied  Digital  Businesses @techcityuk @gerardgrech
  • 4. Recent  OECD/McKinsey  report  (Aug  2016)  puts  UK  in  top   ranking  on  digital  share  of  economy;  a  great  place  to  build   form      
  • 5. Acquired  by  News  Corp  in  2015  –  example  of  traditional   industries  being  transformed  by  disruptors   Acquired  for   £114million   News  Corp  harnesses  Unruly   to:     •   Bet  big  on  mobile  and  video   -­‐    launch  a  new  vertical   video  ad  format  purpose   built  for  mobile  audiences   •  provide  new  insights  to  its   adver.sers  and  improve  ad   engagement  
  • 6. 400  employees  in:   New  York,  Edinburgh,   Glasgow,  Orlando  &   Los  Angeles Fanduel   Web-­‐based  fantasy  sports  game  and  the  largest  daily  fantasy  sports  company  in  the  industry.  As  of  April  2016  most   U.S.  states  consider  fantasy  sports  (including  daily  fantasy  sports)  a  game  of  skill  and  not  gambling.     @techcityuk @gerardgrech
  • 7. Finance  &  Fintech:  Nutmeg   Nutmeg  provides  low-­‐cost  online  wealth  management  makes  investment  expertise   accessible  to  millions  of  people  who  usually  couldn’t  afford  advice   @techcityuk @gerardgrech
  • 8. MagicPony   London  based  Artifical  Intelligence  company  –  uses  neural  networks  –  systems  that   are  designed  to  think  like  human  brains   Twitter  acquired  Magic  Pony   Technology  to  provide  expanded   data  for  images,  used  to:   •  enhance  a  picture  or  video  taken   on  a  mobile  phone   •  help  develop  graphics  for  virtual   reality  or  augmented  reality   applications.   June  2016   $150  million   deal  
  • 9. Deliveroo   Raised  another  $275  million  in  funding,  a  Series  E  investment  -­‐  values  the  company  at  around  $1  billion.     The  investment  will  go  into  growing  its  service  in  both  new  and  existing  markets  &  investing  in  its  new  initiatives  -­‐   includes  a  new  B2B  remote  kitchen  service,  RooBox  -­‐  gives  restaurants  access  to  delivery-­‐only  kitchens  in  key   locations   Live  in  84   cities   Facing  heat  from   competitors  -­‐  targeting   the  higher  end  of  the   prepared  food  market  –   rivals  include  Uber,   which  has  stormed  into   Europe  with  UberEATS,   as  well  as  others  like   Delivery  Hero,  Just  Eat,   and  Amazon  
  • 10. Farfetch   Platform  for  luxury  brands  and  boutiques  from  around  the  globe,  everywhere  from  Tokyo  to  Toronto,  from  Milan   to  Miami.       Farfetch  was  founded  in  London  in  2008  by  the  Portuguese  entrepreneur  José  Neves  and  now  has  offices  in  nine   countries  globally.  
  • 11. TransferWise   Banks  and  other  providers  oVen  add  markup  to  their  exchange  rate  -­‐  TransferWise  transparently   displays  its  fee  upfront  and  deducts  it  before  conversion   Latest  funding  values   TransferWise  at   £750  million  
  • 12. 12  The  impact:  >40%  of    European  ‘Tech  Unicorns'  ($1bn+)  are  in  the  UK       @techcityuk @gerardgrech 47  European   Unicorns       19  UK   Unicorns      
  • 13. 3.  Rich  ecosystem  &  connected  nation   1.  Smart  capital   2.  Strong  business  &  policy  environment   4.  Creative  talent  &  critical  mass  of  expertise   4  Key  growth  drivers  powering  the  UK’s  digital  economy  
  • 14. 1.  More  funds  now  exist,  opening  up  new  opportunities  and   securing  the  growth  potential  of  talented  teams    
  • 15. Selected  Recent  UK  IPOs   $552M Gross   Proceeds $3,341M Gross   Proceeds $2,042M Gross   Proceeds $597M Gross   Proceeds $580M Gross   Proceeds 2,074 2,010 2,536 59 0 1,672 63 8 36 4 31 8 14 6 2 9 0 50 0 100 0 150 0 200 0 250 0 300 0 LSEG NYSE NASDAQ SGX HKSE #ofCompanies* London  Stock  Exchange  is  a  hub  for  international   businesses   Domestic     International     @techcityuk @gerardgrech
  • 16. London/UK  has  a  strong  investment/VC  eco-­‐system     In  2015,  5x  more  VC  investment  than  2010.  >30%  of  all  EU  VC  money.     UK  companies    consistently  raise  >30%  of   all  European  VC  money   th UK  VC-­‐Backed  Investment  Activity   Top  Deals  &  Cities,  Q1’16   @techcityuk @gerardgrech $5B $13B $12B $7B$7B $5B $3B $2B $0B $2B $4B $6B $8B $10B $12B $14B 2016)YTD2015201420132012201120102009 Total-VC-Capital-Invested UK Germany France Israel Russia Sweden Switzerland RoE
  • 17. 82.  End-­‐to-­‐end  policy  conditions  for  tech  growth  are  ripe    Regulatory  environemnt  is  key     >£2.75  Bn       latest  market  Cap   >£1.1  Bn   latest  market  Cap     4.  Corp  Tax:  17%    (joint  lowest  in   the  G20)       1.  Seed  Enterprise  Investment   Scheme  &  EIS:  50%  relief  on   capital  gains  tax   3.  Visas:  Entrepreneurs’  Visa,   Tech  Nation  Visa   2.  R&D  Tax  Credits:  fueling   innovation         5.  London  Stock  Exchange  high   growth  segment   @techcityuk @gerardgrech
  • 18. UN  E-­‐Government  Survey  2016–   UK  ranked  No.1   •  E-­‐Government  development  Index  ranked  UK   No.1   •  E-­‐Participation  index  ranked  UK  No.1     •  E-­‐government  to  provide  public  services   through  one  stop-­‐platforms  &  online   transactions   •  Ensures  that  public  institutions  are  more   inclusive,  effective,  accountable  &  transparent   •  Drive  towards  Open  data  for  public   information  &  scrutiny  
  • 19.  3.  Rich  Ecosystem:  >60  UK  tech  accelerators,    >100  co-­‐                       working  spaces  &  50+  tech  business  support  orgs       @techcityuk @gerardgrech
  • 24. 2 4 +2.8x  1.56M   UK  Tech  Jobs   Jobs  growing   41%   In  non-­‐digital  industries   like  educaOon  &  Finance   Faster  than  the   wider  economy     £50K   Average  UK  Tech   salary   +36%   Higher  than  UK   average  salary     4.  The  UK’s  tech  talent  pool  is  growing  fast     Source:  Tech  Na.on  2016  Report,  Tech  City  Uk/Nesta @techcityuk @gerardgrech
  • 25. 8The  pool  is  deep  &  extensive,  with  international  HQs,  world  class   institutes  &  top  research  universities   International  &  EU  HQs   Technology  Institutes   World  –  Class  Universities  
  • 26. 38   ROUNDS     £1.5  Bn     RAISED   +  £1.22  Bn   RAISED  FROM  5  IPOs       +  10  ACQUISITIONS     In  the  last  20  months…   Good  conditions  create  great  companies   @techcityuk @gerardgrech
  • 27. Why  is  all  this  so  important?  We  need  to  create  a  sustainable  ecosystem   and  future-­‐proof  the  economy  and  controibute  to  making  it  more  resilient   &  productive.       InsDtutes  UniversiDes     Govt.  Dept.   (naDonal  &   Inter).       Local   AuthoriDes     Investors     Entrepreneurs   Corporates     Incubators   Accelerators   Stock   Exchanges   Colleges   InternaDonal   hubs   @techcityuk @gerardgrech Developers  
  • 28. |         Thank  you  for  listening.           Gerard  Grech,  CEO,  Tech  City  UK       Visit  our  website:  Techcityuk.com     Follow  us  on  Twitter:                            @techcityuk                          @gerardgrech